Sky News business editor Michael Wilson

No one wants to call a recession, least of all the CBI, which came out with some worrying figures today, nonetheless.

When I talked to Ian McCafferty, the CBI’s chief economist, he said ‘we’d never rule out a recession as we’re in uncertain times, but what we will see is a period of sub-par growth’.

While the bosses’ organisation never wants to scare the horses too much, their central concern is that far from the Chancellor’s preferred view that the economy will bounce back next year, the CBI thinks that it will shrink further as the tightening of credit brakes the country’s output.

That’s a worry because Alistair Darling predicted in his Budget, not two weeks ago, that his borrowing will be £43bn for 2008/9, 40% more than the Budget predicitions a year ago.

So, with soaring energy, mortgage and food prices, where will we feel the pinch? But the credit crunch is not just a headline business and economy concern.

As the high street banks and credit card companies tighten their terms, doorstep lenders and loan sharks are moving in.

According to the leading, and legal, doorstep lenders, Provident Financial there are now ten million people in the ‘non-standard’ category of borrowers, some of whom will be paying interest rates of 100% or more. Imagine if you’re finding difficulty with that, what the loan sharks will be charging.

Debt at the doorstep will undoubtedly be another rising social problem in our already overborrowed lifestyle.

Comments

[Tony Richards - Germany 26 Mar 2008 20:59:47]

Doorstep Loan Sharks! Don't make me laugh - I have a MBNA credit card and I have never been over my limit but out of my monthly payment to them of £161.74 they charged me £146.52 interest - I paid a staggering £15.22 off the outstanding balance. I don't know the name of the CEO of MBNA but wonder if it is Dick Turpin!

[Trevor 26 Mar 2008 19:19:12]

"Alistair Darling predicted in his Budget, not two weeks ago, that his borrowing will be £43bn for 2008/9, 40% more than the Budget predicitions a year ago."
-----------------------------

Well, it's clear that this lot couldn't run a can-up in a brewery. Can't think of one thing they haven't screwed up.
But what can you expect when a Chancellor with a History degree is followed by one with a Law degree ? (I have a law qualification myself; but I say unequivocally that lawyers do not generally make good financial managers; neither do historians when they run out of luck and inherited good books.)
Doesn't Labour have anyone with a decent qualification in Economics ?
I understand that the Treasury is similarly financially unqualified at the top end.

[Dennis, Cramlington Northumberland 25 Mar 2008 15:59:10]

Surely yet to be acknowledged by the as yet uninformed nation is that the Government itself is fast becoming the biggest loan shark of them all...

Why else would they be forcing their very own bank - you know, the one they forcibly seized from the NR Pensioner shareholders with little prospect of fair compensation, if the same Govt has anything to do with it - to pay huge interest payments to itself?

That is, huge Interest payments to the same Government - on money it has borrowed from the very same Government?

Don't forget to mention that (in the small print no doubt) on the doorsteps please, you 'Westminster-Lend-The- Taxpayers'-Money-At-Great-Interest-Payable -By-The-Taxpayer' Salesmen.

[Khalid 25 Mar 2008 14:26:17]

Sir
Naturally the [Disbelief] surrounding the outrageous rates of interest many a commercial shark charges brings a shudder to the fish bone, let alone the doorstep spine.
[Recession] whether it be mad made, commercially sponsored or overlooked by many a prudent budgeting government, does give the humble household time to re-evaluate its outgoings, whilst at the same time provides for many an ombudsman to ensure that the giants whom seem to have a lot of energy are bought to account.
On the brighter side of the economy, I took Eon' perverse standing thus far as inline discounts circa 19% to the energy ombudsman on the grounds that bills are paid online, just that they cannot dip into my account when they want as I deem that as financial theft, whilst all other such criteria to qualify remain.
But being an ombudsman, he/she failed to understand the issue, has put it back by 8 weeks and perhaps is hoping that the supplier will see sense.
So, Eon, buckle up, reduce all your perverse pre-pay tarrifs and bring them in line with online accouatability methodologies or I will gather enough energy to enfore such discounts. get Me Drift?

[Elizabeth Davies Cape Town 25 Mar 2008 13:13:41]

There are many "funny" terms being invented to prevent anyone using the "R" word.
What is wrong with saying Recession.. the world will not come to an abrupt end.
Subpar growth..what's that!
Stagflation is another. What next. Keep it real I say.
People should be taking stock and pull in the horns, the markets would be much better off if the truth be told, we are all grown ups in the financial world, stop treating people like children.